Entrepreneurs are only as good as their last great idea, so the pressure on them to generate more new ideas is constant. The trouble is, in the vast majority of cases the most promising of lightbulb moments turn out to be commercial duds...
According to US innovation guru Mark Payne, the ideas failure rate is around 90%, and as someone who has made a living out of helping organisations work out why their ideas have failed and how to make them work, he should know.
His firm, Fahrenheit 212, has worked with a string of major brands including Starbucks, Coca Cola and Samsung, and in his book ‘How to Kill a Unicorn’ he recounts some of the flawed approaches to innovation - outwardly good ideas that for one reason or another couldn’t translate into revenue – that he encountered along the way.
So what makes one idea turn into a major money-spinner while others turn out to be flops? Whatever the secret of successful innovation is, one thing Payne is clear about is that company size has nothing to do with it.
"Whether your company is large or small, the reasons why ideas fail are the same – but, because they don’t have the massive resources of large organisations, smaller businesses can’t afford to get innovation wrong," he says. "They need to make the right decisions and stick to the rules, starting with the brainstorming process."
Get tough with new ideas
Brainstorming sessions typically focus on generating high volumes of thoughts and suggestions, many of them quite ridiculous, that are greeted with polite smiles and encouraging nods from others in the session. What these fledgling ideas should really be subjected to is some tough scrutiny, says Payne.
"Giving ideas tough love through some tough questions early on will help to ensure they can survive in the real world. If you don’t ask those tough questions, you end up with very little that is of any use. Brainstorming should be about focusing on a few concrete outcomes, rather than a lot of possibilities," he says
Innovation is a two-sided concept
Two-sided innovation solves the needs of the consumer and the needs of the business in real-time. It is a simple premise, but one that many businesses get wrong because they tackle the two things separately.
"You lay out all the issues and problems that your customers and your company have raised, side by side, and you look for connection points," says Payne.
For example, your business might aspire to a more premium price point while your customers are looking for something a bit more special.
"That is your touch point and immediately you have transformed your probability of successful innovation. It means understanding what the company needs, not just at the endpoint, but throughout the entire journey."
Don’t shy away from the big challenges
Small businesses and start-ups are naturally inclined to focus on small scale ideas, but Payne’s advice, when it comes to innovation, is that it can pay to think big.
"Big problems that need solutions aren’t necessarily the hardest problems. Big is a problem that a lot of people face, a lot of the time, and care about. Small problems, that might appear easier to try to solve, matter to a few people, rarely," he says.
Encourage cultural creativity
Without a genuine culture of creativity, innovation stands little chance of succeeding.
Many of today’s start-ups are forged from collaborative, free flowing creativity that provides the ideal medium for successful innovation. But in businesses where a more conservative and traditional culture prevails, resistance to creativity and change can be one of the biggest barriers to innovation.
Cultures can be changed, albeit slowly, however, successful innovation needs the right resources, the right teams and the right mix of people on board.
Payne says: "Different people in different roles have different approaches to innovation. What you want is an even balance of highly inventive and creative types, and sound strategic types; people with good operational and financial capabilities, and you have them collaborate, right from day one."
Nobody knows what the next big business idea will be, but a more stringent innovation process will certainly boost the chances of creating more business ideas that pay.